NEW YORK — Costs from the now-completed acquisition of Calvin Klein threw Phillips-Van Heusen Corp. for a loss in the fourth quarter, but once the accounting dust settled, CKI contributed handsomely to the company’s top and bottom...
NEW YORK — Costs from the now-completed acquisition of Calvin Klein threw Phillips-Van Heusen Corp. for a loss in the fourth quarter, but once the accounting dust settled, CKI contributed handsomely to the company’s top and bottom lines.
For the three months ended Feb. 1, PVH recorded a net loss of $9.2 million, or 47 cents a diluted share. That compares with last year’s profits of $5.7 million, or 20 cents.
But when charges related to the integration of the Calvin Klein business are excluded, as well as some other special items, PVH saw profits advance 67.7 percent to $9.6 million, or 14 cents, which beat the Wall Street consensus estimate by a penny.
Net revenues for the quarter grew 13.3 percent to $357.1 million from $315.3 million a year ago.
“The integration of the Calvin Klein operations is complete,” said chief executive officer Bruce Klatsky in a statement. “We have finalized the transfer of the Calvin Klein women’s and men’s wholesale collection apparel businesses to Vestimenta. The better women’s sportswear line, licensed to a joint venture formed by Kellwood and G.A.V., had an extremely successful initial launch for spring 2004. Similarly, the launch of the men’s better sportswear line for fall 2004 is going significantly better than planned.”
Klatsky said the contribution to earnings from Calvin Klein, as well as continued strong growth in the wholesale dress shirt and sportswear businesses, enabled PVH to meet the high end of its previous bottom-line guidance, exclusive of special charges.
Indeed, admitted weakness in PVH’s retail operations, as well as an operating loss of $234,000 in the apparel and footwear business, was more than offset by $11.4 million in operating income from the Calvin Klein segment on $40.4 million in revenues from that business. Klatsky added that the retail business had begun to recover by yearend.
“The sharp earnings declines exhibited by our retail businesses in the first nine months of the year stabilized during the Christmas season,” said Klatsky.
Overall, for the full fiscal year, PVH reported a net loss available to common shareholders of $5.3 million, or 18 cents, versus last year’s net earnings of $30.4 million, or $1.08.Excluding transition costs related to the CKI deal and other items, PVH would have reported a 65.8 percent increase in net earnings to $50.5 million, or 98 cents a share. EPS in the current year is lower than the year-ago figure due to preferred dividends related to the CKI deal.
In guidance, Klatsky said first-quarter EPS is forecast at 13 to 14 cents excluding costs from exiting the company’s Bass wholesale business and closing underperforming retail operations, among other special items. For the full fiscal year, earnings exclusive of charges should be $1.10 to $1.15 a share, Klatsky said.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)